US home buyers are consistently prepared to pay a premium for homes fitted with solar installations, according to an extensive study by two leading research institutes.
Led by the Department of Energy’s Berkeley Lab in partnership with Sandia National Laboratories, a number of other universities, and property appraisers, the study found that premiums paid for properties fitted with an average-sized 3.4kW PV system equate to US$15,000.
The study examined almost 22,000 home sales in eight states between 1999 and 2013, around 4,000 of which contained PV systems.
“Previous studies on PV home premiums have been limited in size and scope,” said Ben Hoen, the lead author of the new report. “We more than doubled the number of PV home sales analysed, examined a number of states outside of California, and captured the market during the recent housing boom, bust, and recovery.”
The average US$15,000 premium identified by the study works out at about US$4/W of installed PV. It found only a small and “non-statistically significant” difference between PV premiums for new and existing homes.
Other findings included the prevalence of a “green cache”, describing instances where home buyers are prepared to pay a certain amount for a PV system of any size and incrementally more as the system size increases.
The study concluded that with the number of homes with solar reaching half a million in 2014, and that number rising rapidly, the real estate industry would need to develop new methods to value those homes accurately. It also highlighted the benefits of reliable valuation methods in further boosting the residential PV sector.
“As PV systems become more and more common on US homes, it will be increasingly important to value them accurately, using a variety of methods,” said appraiser and the report’s co-author Sandra Adomatis, who has also written and spoken extensively on valuing green features.
“Our findings should provide greater confidence that PV adds a quantifiable premium to a wide variety of homes in California and beyond.”